Madras High Court
Dalmia Cement (Bharat) Ltd vs Competition Commission Of India on 29 September, 2023
W.A.Nos.2227 & 2218 of 2023
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 29.09.2023
CORAM :
THE HON'BLE MR.SANJAY V.GANGAPURWALA, CHIEF JUSTICE
AND
THE HON'BLE MR.JUSTICE P.D.AUDIKESAVALU
W.A.Nos.2227 & 2218 of 2023
Dalmia Cement (Bharat) Ltd.
Rep. by its Manager-Legal, Deepak R
Having registered Office at:
Dalmiapuram, Dalmiapuram Taluk
Tiruchirappalli District 621 651
Tamil Nadu
Having South Regional Office at:
No.26, Fagun Mansion
Ethiraj Salai, Egmore Appellant in
Chennai 600 008. .. W.A.No.2227 of 2023
The India Cements Limited
Represented by its Authorised Signatory
Coromandel Towers, No.93
Santhome High Road
Karpagam Avenue, RA Puram Appellant in
Chennai – 600 028. .. W.A.No.2218 of 2023
Vs.
1. Competition Commission of India
Through the Secretary
9th Floor, Office Block – 1
Kidwai Nagar (East)
New Delhi 110 023, India.
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2. Office of the Director General
Competition Commission of India
“B” Wing, HUDCO Vishala
14, Bhikaji Cama Place
New Delhi – 110 066.
3. Builders Association of India
D1/203, Aashirwad Complex
Rep. by its Authorised Signatory
Green Park Main Respondents in
New Delhi 110 016. .. W.A.No.22263 of 2023
1. Competition Commission of India
Rep. by its Secretary
9th Floor, Office Block – 1
Kidwai Nagar (East), Opposite Ring Road
New Delhi 110 023.
2. Builders Association of India
G-1/G-20, Commerce Centre
J.Dadajee Road, Tardeo Respondents in
Mumbai – 400 034. .. W.A.No.2218 of 2023
Prayer in W.A.No.2227 of 2023: Appeal filed under Clause 15 of the
Letters Patent against the order dated 14.08.2023 in W.P.No.22263 of
2023;
Prayer in W.A.No.2218 of 2023: Appeal filed under Clause 15 of the
Letters Patent against the order dated 14.08.2023 in W.P.No.22045 of
2023.
For the Appellant in : Mr.Sankaranarayanan
W.A.No.2227 of 2023 Senior Counsel
for Mr.K.Prahalad Bhat
For the Appellant in : Mr.P.S.Raman
W.A.No.2218 of 2023 Senior Counsel
for Mr.Abishek Jenasenan
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For the Respondents : Ms.Madhavi Diwan
Senior Counsel
for Mr.R.Thirunavukarasu
for R1 in both W.As
Mr.V.Chandrasekaran,
Ms.D.Anu Monga and
Mr.Rahul Goel
for R3 in W.A.No.2227 of 2023
and for R2 in W.A.No.2218 of 2023
COMMON JUDGMENT
(Delivered by the Hon'ble Chief Justice)
The Competition Commission of India, under Section 26(1) of
the Competition Act, 2002 (for brevity, hereinafter referred to as “the
Act of 2002”) ordered to issue suo motu proceedings to analyse the
complaints received by it against various cement manufacturers. The
complaints were on account of steep rise in price of cement. It directed
the office of the Director General of the Competition Commission of
India to investigate the complaints and further to determine whether
the cement manufacturing Companies had committed any act in
contravention to Section 3(3)(a & b) of the Act of 2002. It appears
that the issue of cartelisation was also investigated. Pursuant thereto,
the Director General of the Competition Commission of India
conducted search and seizure and he initiated investigation.
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2. It appears that on 07.12.2021, the Builders' Association of
India (in short, hereinafter referred to as “the BAI”) filed an application
before the Competition Commission of India for impleadment. It
sought to be impleaded as an informant, claiming that it has sufficient
interest in the outcome and is a necessary party in the suo motu
proceedings initiated by the first respondent. The application was
dismissed by the first respondent vide order dated 29.12.2021.
3. The BAI challenged the said order before the Delhi High Court
by filing a writ petition. The Delhi High Court, under order dated
26.09.2022, granted liberty to the BAI to move the Competition
Commission of India under Regulation 25 of the Competition
Commission of India (General) Regulations, 2009 (fore brevity,
hereinafter referred to as “the Regulations of 2009”) and directed the
Competition Commission of India to consider such representation, in
accordance with law.
4. The BAI, on 27.09.2022, filed an application for impleadment
as a party in the said suo motu proceedings. On or about 05.07.2023,
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the first respondent allowed the application filed by the BAI. The same
was assailed by the appellants before the learned Single Judge of this
Court by filing writ petitions W.P.Nos.22263 & 22045 of 2023. The
learned Single Judge of this Court, under the impugned order dated
14.08.2023, declined to exercise its jurisdiction under Article 226 of
the Constitution of India both on the ground of forum conveniens, as
well as comity of Courts. It was observed by the learned Single Judge
that the Delhi High Court is positioned with all the jurisdiction to take
cognizance of the dispute raised before it as regards the very same
impugned order, now being challenged in these writ petitions. It is
observed by the learned Single Judge that the Delhi High Court has
heard the matters at length and reserved judgment, while this Court is
yet to examine the case on merits. It appears that the order assailed
by the present appellants before the learned Single Judge was assailed
by another cement Company, viz., the Ultra Tech Cement Company
before the Delhi High Court.
5. It is in the light of the above, the appellants have approached
this Court by filing the present appeals under the provisions of the
Letters Patent.
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6. We asked the learned Senior Counsel appearing for the
respective appellants and the respondents whether they would argue
the case on merits. All the learned counsel argued the matter on
merits and they also submitted their written submissions on the point
of jurisdiction and merits of the matter.
7.1. It is submitted by the learned Senior Counsel appearing for
the respective appellants, on merits, that the Competition Commission
of India has allowed the application filed by the BAI for impleadment
without issuing notice to the appellants. The Commission has not
adhered to the principles of natural justice. It is submitted that the
argument before the Competition Commission of India is regarding the
existence/non-existence of a cartel. The important feature of the
Regulation 25(1) of the Regulations of 2009 is that the applicant must
have interest in the outcome of the proceedings. The said aspect
needs to be considered. It is not that any person can approach the
Competition Commission. It is only that the applicant must be
connected either with the term 'consumer' or 'enterprise'. The BAI is a
Society, registered under the Societies Registration Act, 1860 with
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various builders and Members. These builders purchase cement from
the Companies like the appellants. The BAI does not per se buy goods
and use it for its own. The Members do not use the goods purchased
by the BAI. Therefore, the BAI would not come within the definition of
'consumer'.
7.2. The BAI is not a wholesaler nor a retailer of cement and is
not a consumer within the meaning of Section 2(f) of the Act of 2002,
therefore, it cannot be a party within the meaning of Regulation 2(i) of
the Regulations of 2009. In view of that, the order of the respondents
suffers from error apparent on the face of the record. The BAI, at the
most, can be a witness, however, not a necessary or appropriate
party.
7.3. Under Regulation 25(4) of the Regulations of 2009, the
impleaded party would be entitled to the copies of the documents
previously filed in the matter by the other parties. The documents are
sensitive, contain intricate details of the internal financial and
marketing commercial management of the appellants. In response to
the investigation report, the appellants have parted with vital
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information on the costing aspects of the production and marketing of
goods. The BAI is a body representing the Members, negotiates with
the cement manufacturers and obtains substantial benefits for its
Members in the matters of pricing of cement. The internal workings,
which if they find ways into the hands of the BAI, tends to tilt the
negotiating table completely in favour of the BAI, gaining an
advantage over all others.
7.4. The Competition Commission of India should maintain
confidentiality of the identity of an informant on a request made to it in
writing. At the time when the investigation was completed and the
appellants deposed before the Investigating Authority, the BAI was not
present. There was no need to specifically treat any document or
deposition as confidential at that time, but there is a likelihood of the
Competition Commission of India parting with these valuable,
inalienable materials with the BAI. Therefore, the appellants are
prejudiced by the impleadment of the BAI.
7.5. Two contradictory orders were passed. One order, rejecting
the impleadment of the BAI, was passed on 29.12.2021 and still
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subsisting and has not been set aside and the second order is passed
impleading the BAI as a party. It is further submitted that no reasons
are given to justify the impleament of the BAI. Section 57 of the Act of
2002 provides that no information obtained by the Competition
Commission of India shall, without the previous permission in writing
of the enterprise, be disclosed than in compliance with or for the
purposes of this Act. Regulation 34 of the Regulations of 2009 sets out
the process for treating the information confidential. The claim of the
Competition Commission of India that only non-confidential
information will be provided to BAI is specious, as the appellants have
no reason to mark any information as confidential and now, everything
will be provided to the BAI.
8.1. Learned counsel for the respondents submits that the
argument that the BAI's impleadment would give it access to the
appellants' confidential, sensitive business data is an afterthought and
without merit. Regulation 35(2) of the Regulations of 2009 clearly
shows that the parties are given an opportunity to self-certify and
segregate the documents furnished by them as “confidential” and
“non-confidential”. Therefore, the parties fully know at the very outset,
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the consequences of marking any document as “non-confidential”. In
view of Regulation 37(2) of the Regulations of 2009, the BAI could
have taken inspection of the documents as a Member of the public
after showing sufficient cause. The Members of the BAI purchase
cement from the appellants and are implemented as parties.
8.2. The appellants and their competitors from the cement
industry have already inspected each other's documents on multiple
occasions. No grievance has been raised by the appellants over the
sharing of the documents with their own competitors from the cement
industry.
8.3. The Commission was not required to provide the appellants
an opportunity of hearing while impleading the BAI or allowing its
applications for inspection. Reliance is placed on the judgment of the
Apex Court in the case of SAIL vs. The Competition Commission of
India1. The impleadment entails no civil consequences, as such, the
opportunity of hearing need not be provided. The parties, including the
appellants, have been given the liberty to file their replies to the BAI's
1 (2010) 10 SCC 244
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opinion. It is submitted that the BAI has already done inspection of the
non-confidential records on 17.07.2023, pursuant to the order passed
by the Commission on 05.07.2023.
9. We have considered the submissions canvassed by the
learned counsel for the parties. The respective counsel have made
their submissions on the either aspects of jurisdiction as well as the
merits of the matter.
10. On 25.08.2023, we have heard the learned Senior Counsel
for the appellants and learned counsel for the respondents on the issue
of jurisdiction, as well as on merits qua the order impugned before the
learned Single Judge and subsequently, written arguments were
submitted by the parties on 05.09.2023. On 12.09.2023, learned
counsel for the appellant in W.A.No.2227 of 2023 submitted that the
copy of the written submissions filed by the BAI was not served. As
such, the matter was adjourned to 15.09.2023 and on 15.09.2023, the
matter was reserved for orders. As we have considered the
submissions on merits, we would be dealing with the merits of the
matter also.
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11. The proceedings under the Act of 2002 would be proceedings
in rem. Under Regulation 37(2) of the Regulations, 2009, the
Commission may, on an application of a person, who is not a party to
the proceedings, on sufficient cause demonstrated, allow such person
inspection of documents or records mentioned in Sub-Regulation (1) of
Regulation 37 of the Regulations of 2009. Under Sub-Regulation (1) of
Regulation 37 of the Regulations of 2009, a party to any proceeding of
an ordinary meeting of the Commission may, on an application in
writing in that behalf, be allowed to inspect or obtain copies of the
documents or records submitted during proceedings, subject to the
provisions of Section 57 of the Act of 2002 and Regulation 35 of the
Regulations of 2009.
12. Regulation 35 of the Regulations of 2009 mandates the
Commission to maintain confidentiality of the identity of the informant
and under Sub-Regulation (2) of Regulation 35 of the Regulations of
2009, any party may submit a request in writing to the Commission or
the Director General, as the case may be, that a document or
documents, or a part or parts thereof, be treated confidential.
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Procedure is prescribed as to how the confidential documents are to be
marked. Under Sub-Regulation (8) of Regulation 35 of the Regulations
of 2009, at the request of the parties under Sub-Regulation (2), the
Commission or the Director General, if satisfied, shall direct that the
document or documents or a part or parts thereof shall be kept
confidential for the time period to be specified. As such, the right
available to the parties is also available to any person who is not a
party to the proceedings to allow inspection of documents.
13. The apprehension of the appellants in implementing BAI is
that, as the BAI was not a party, they may not have marked some of
the documents as confidential documents and the impleadment of the
BAI would have prejudiced them. In view of the fact that they may not
have marked some relevant documents as confidential, the BAI will
have access to it. In fact, the BAI can be categorized as a person, as
per the definition of a 'person' under Section 2(l) of the Act of 2002.
14. The BAI was also allowed to inspect all documents as per the
condition of the BAI on 05.07.2023. It was also provided with
the non-confidential version of the Director General report under the
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order dated 06.10.2022.
15. The appeals are filed by the present appellants on or about
16.08.2023 and 21.08.2023 respectively. Prior to the filing of the
appeals, the BAI has already been provided with the inspection of the
documents. In view of that, the entire premise of arguments of the
appellants that by inclusion of BAI as a party, it would have access to
the inspection of the documents, now would be futile.
16. No doubt, before passing the order of impleadment, the
Competition Commission of India ought to have given notice to the
present appellants. That is the minimum requirement of the principles
of natural justice. However, as the matter has proceeded further and
that the BAI had already been given the inspection of all the
documents of the appellants, as contemplated under the Regulations of
2009, now nothing would survive for the appellants to agitate.
17. In the light of that, these appeals stand dismissed. As on
merits, we have not entertained the appeals. We did not consider the
aspect of jurisdiction, including that of forum conveniens and comity of
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Courts. There will be no order as to costs. Consequently,
C.M.P.Nos.19215, 19216 & 19299 of 2023 are closed.
(S.V.G., CJ.) (P.D.A., J.)
29.09.2023
Index : Yes/No
Neutral Citation : Yes/No
drm
To:
1. Competition Commission of India
Through the Secretary
9th Floor, Office Block – 1
Kidwai Nagar (East)
New Delhi 110 023, India.
2. Office of the Director General
Competition Commission of India
“B” Wing, HUDCO Vishala
14, Bhikaji Cama Place
New Delhi – 110 066.
3. Builders Association of India
D1/203, Aashirwad Complex
Rep. by its Authorised Signatory
Green Park Main
New Delhi 110 016.
4. Builders Association of India
G-1/G-20, Commerce Centre
J.Dadajee Road, Tardeo
Mumbai – 400 034.
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THE HON'BLE CHIEF JUSTICE
AND
P.D.AUDIKESAVALU,J.
(drm)
W.A.Nos.2227 & 2218 of 2023
29.09.2023
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